The efficiency of technology cannot be denied in the growth of a company, but its fallout on the existing workforce – of making them redundant – is also a cause of grave concern.
Such repercussions have already been observed in various sectors, and now the hospitality sector in the startup ecosystem is facing a similar situation, with technology taking a direct toll on employment.
In a recent case, budget hotel chain Treebo fired between 70 and 80 employees – about 10 per cent of the total workforce of 800 people. The company justified the move by saying it is fast moving towards the adoption of technology and doesn’t need as many workers.
The Bengaluru-headquartered company also emphasised the need to adopt the technology, which has already helped it to grow rapidly and made operations lean and efficient. It thus took the decision to reduce costs and fix the growth graph.
The development comes almost a year after the company raised $34 million in a Series C funding round led by Hong Kong-based investment firm Ward Ferry Management and Karst Peak Capital.
A few months ago, Treebo faced a setback when India’s biggest OTA company MakeMyTrip dropped the budget hotel chain company from the listing on the platform. The Ctrip-backed OTA company rather re-established the broken relationship with Oyo and on-boarded it on the platform after 18 months.
In the past few months, a lot has changed in the hospitality sector of the startup industry. Oyo is once again emerging as a strong force which is on a path to change the face of the budget hotel industry in India.
The SoftBank-backed company has pivoted from aggregation to a franchise-based model and is now projecting itself as a pure-play hotel brand. In the past few months, it has launched operations in China, Dubai and London.
Amidst the fast-changing hotel segment, where the oldest player Oyo is reclaiming its ground and makes its presence felt, it is difficult to say whether this aggressive nature of the company hasn’t taken away the others’ business.
The development was first reported by ET.